SpaceX to Pay Over 8% on $40 Billion Bond Sale as AI Credit Tightens

SpaceX is paying more than 8% on a $40 billion bond sale, and lenders seem entirely comfortable demanding it. The riskiest tranche of the offering is expected to yield roughly 8.3%, while a safer slice backed by some of the company's chips should price near 7.75%, according to Semafor, citing people familiar with the matter. Both levels sit more than a full percentage point above where SpaceX's outstanding bonds currently trade.

Apollo and Goldman Sachs are arranging the deal, with final pricing expected next week. The terms could still shift before the books close, the report noted. The proceeds will finance a large-scale expansion of chips and data centers under CEO Elon Musk.

What did the Q3 numbers show?

The quarter that accompanied the fundraising was, on paper, spectacular. Revenue reached $14.575 billion, up 161% from $5.576 billion a year earlier and roughly 87% above the $7.814 billion booked in the prior quarter. Analysts had expected $12.72 billion.

The profit swing was sharper still. Operating income came in at $2.791 billion, against an operating loss of $273 million a year ago and a loss of $143 million in the second quarter. Net income hit $4.404 billion, far ahead of the $1.57 billion to $1.88 billion analysts anticipated, compared with a net loss of $1.054 billion a year earlier. Diluted U.S. GAAP earnings per share were $0.35, versus a $0.15 consensus and a $0.36 loss a year ago.

SpaceX Q3 metric	Reported	Prior-year
Revenue	$14.575 billion	$5.576 billion
Operating income	$2.791 billion	-$273 million
Net income	$4.404 billion	-$1.054 billion
Diluted EPS	$0.35	-$0.36

Where is the revenue actually coming from?

The Superintelligence segment did the heavy lifting. It posted revenue of $7.56 billion, up 195% quarter over quarter and 830% year over year — roughly 20% above expectations and about 52% of total company revenue. A company known for rockets now draws more than half its sales from AI compute and model services.

Musk told the earnings call that SpaceX aims to add 10 gigawatts of AI compute capacity in 2027. Fourth-quarter capital spending is projected at $35 billion to $40 billion, roughly double the near-$20 billion spent in the third quarter.

Strong results did not protect the bondholders. SpaceX's existing bonds have softened in recent sessions as investors weigh the spending plans and a growing debt load. The cost of insuring the company's debt against default has also widened — a signal that some credit investors harbor doubts about the strategy.

How strained is the broader AI credit market?

The financing lands in a deteriorating market for AI-related credit. CoreWeave has been hit hard this month, with shares down 36% in October and its unsecured debt yielding about 15%. Spreads on its five-year credit default swaps stand near 1,145 basis points, a level widely read as distressed.

The strain has moved up the credit ladder. Oracle retains an investment-grade rating, yet its five-year default swaps recently traded around 295 basis points, a range more typical of high-yield issuers, according to CNBC. Meta added to the anxiety on Thursday: its shares fell more than 7% after the company lifted the low end of its capital spending forecast to $135 billion to $145 billion and unveiled plans to sell a new class of non-voting stock to help fund it. The cost of insuring Meta's debt reached a record.

Analysts have cautioned that the borrowing spree leaves AI infrastructure companies exposed to any sharp pullback in demand, while loading them with chips that depreciate within five or six years. Some of those very chips will now serve as collateral for part of SpaceX's new debt. There is a certain symmetry in financing depreciating hardware with debt priced like it.

What happens next week?

The timing is delicate for other reasons. SpaceX is weighing a potential merger with Tesla, and President Donald Trump bought $5 million of the company's bonds in August.

For bond investors, the key question next week is whether final coupons land above or below early guidance. A print at or near the top of the range would underscore how much more expensive borrowing has become for even the largest AI players, and could set a benchmark for other issuers lining up deals in the months ahead.